Northumbrian Water Group has published its Interim Management Statement for the period 1 April 2010 to 28 July 2010. The Board confirmed that trading has been in line with expectations and that it was continuing to identify and drive further efficiencies throughout the business.

Water and sewerage charges at the Group’s principal subsidiary, Northumbrian Water Limited, have increased by 5.3% for 2010/11.

Operating costs for the 12 months to 31 March 2011 are forecast to increase by around 4% (excluding restructuring costs in 2009/10). The company said this reflected increased depreciation, rates, hired services and pension costs, offset by savings on power, which is bought forward to March 2015.

The Board said that capital investment in the regulated business is progressing in line with the final determination. A £12m contract has been awarded for the Wormingford to Abberton pipeline associated with the Abberton reservoir expansion scheme.

Contracts for the remaining section of the pipeline and the pumping stations will be awarded in 2010/11 according to programme requirements. In addition to Abberton, we have also awarded a number of major Framework Agreements associated with the water distribution and maintenance networks. The contracts cover work in both operating areas and will cover all NWL’s water networks requirements to 31 March 2015.

The Group continues to have a strong funding position with sufficient resources to meet all the requirements of the business to the end of 2011 -  discussions with the European Investment Bank for a new loan facility of £150m are at an advanced stage.

The half-yearly results for the six months ending 30 September 2010 will be announced on 30 November 2010.